London Clubs International

History

London Clubs originated as a chain of casinos owned by the conglomerate Grand Metropolitan. In 1988, Grand Metropolitan decided to sell its casino division to focus on its core businesses of food, beverages, and retail. The next year, London Clubs became an independent company, when Grand Metropolitan sold an 80 per cent stake in the chain in a management buyout for £128 million. Its operations at the time comprised six casinos in London, one in France, and five on Cunard cruise ships.

In 1991, British gaming regulators opened an investigation of London Clubs, focusing on alleged violations of casino regulations and questionable backgrounds of some of the company's shareholders. The Gaming Board decided to oppose license renewals for the company's casinos in London. Ultimately, London Clubs was able to satisfy regulators by replacing its top management and arranging for shareholder David Shamoon to sell his stock, and the casinos' licenses were renewed.

LCI became a publicly traded company in 1994 when it was floated on the Unlisted Securities Market.

By 2001, LCI had developed severe financial problems, after its failed venture in the Aladdin Casino on the Las Vegas Strip. A combination of cost overruns, declining tourism, and poor design led to the casino filing bankruptcy in September 2001 and eliminating LCI's equity in the casino.

In 2006, London Clubs International was acquired by Harrah's Entertainment. Before being bought by Harrah's, LCI was in negotiations with Stanley Leisure (England's largest casino operator) about a possible merger, but the latter were outbid by Harrah's. Genting Group, a Malaysian gaming giant, was also interested in LCI. "London Clubs is an important strategic asset for foreign gaming companies wanting to establish a footprint in the UK ahead of deregulation," said Matthew Gerard of Investec Securities. Interest in British casinos had increased in 2006 due to legislation that allowed for larger "Vegas style" casinos.